| | | | | AT&T takeover of Time Warner hits snag | | This time last week, I was under the impression that AT&T's acquisition of Time Warner (CNN's parent company) was about to be OKed by the Justice Department. That's what my sources inside the companies thought, as well. But the "Media Merger of the Decade" has hit a serious snag.
First the WSJ reported last week that the DOJ was NOT close to approving the deal, and in fact might sue to block the deal from happening. Then, right after lunchtime on Wednesday, the FT published this: "AT&T has been told by the US Department of Justice that it needs to sell CNN" to get the deal approved.
It was a bombshell story -- the Trump administration telling a company to dump a channel the president doesn't like?! -- but there's a lot more going on here... AT&T and the DOJ may be heading to court... | | >> What will Stephenson say on Thursday? | | | AT&T CEO Randall Stephenson will be interviewed on stage at the NYT's Dealbook conference at 1:20pm on Thursday. Andrew Ross Sorkin will surely ask him what's going on... | | >> Why did Delrahim change his mind? | | Stephenson's opponent is the newly installed DOJ antitrust chief Makan Delrahim. Last year, Delrahim said "I don't see this" AT&T deal "as a major antitrust problem." Then Trump nominated him to the DOJ post. "Maybe he has had a legitimate change of heart about the arrangement since inspecting the deal more closely from his perch at the Justice Department. But his new boss has left him with some troubling appearances," Jim Rutenberg writes in Thursday's NYT...
Alright, here's what we know so far... | | After the WSJ story hit last Thursday, AT&T execs wondered, what does the DOJ want? The two sides corresponded on Friday. Then on Monday Stephenson had his first face-to-face meeting with Delrahim. That's when Delrahim outlined the DOJ's argument that the acquisition would cause anticompetitive harm. The two men discussed divestitures that might satisfy the government's concerns. It did not go well.
On Wednesday, sources on both sides disagreed about who brought up what. Some sources said Stephenson floated the possibility of selling CNN or other assets. Other sources said the DOJ demanded more -- just not the spin-off of CNN, but the sale of the entire Turner division, which includes CNN, TNT, TBS, and other channels. Another option: selling DirecTV, the satellite broadcaster that AT&T bought two years ago. (Right after the FT story broke, the NYT came out with a story describing the Turner and DirecTV options.)
Here's the thing: In Stephenson's mind, those aren't really "options" at all. These are "non-starters," as one source put it. DirecTV is integrated into AT&T! And Turner is responsible for much of Time Warner's profitability. "It's a false choice," one of the sources told me, asserting that the DOJ's demands are really an attempt to punish CNN. A "fig leaf."
But the DOJ doesn't see it that way at all... | | Here are the two competing narratives | | Narrative #1: The DOJ is putting consumers first and fighting Big Media consolidation. This is an issue Republicans and Democrats can both get behind.
Narrative #2: Something's not right here. The GOP is supposedly business-friendly and supportive of mergers. So why is the DOJ taking a hardline approach with AT&T? The obvious answer has to do with Trump's contempt for CNN.
I'll come back to that. But let's stick with the timeline here... | | "I have never offered to sell CNN and have no intention of doing so" | | In the 2pm hour on Wednesday, the DOJ was flooded with requests for comment about the FT story. "DOJ demands AT&T sell CNN?!" A source within the agency denied it, telling reporters that "the parties offered to divest CNN and the DOJ Antitrust Division flatly rejected it."
When Stephenson saw that, he issued a statement. "Until now, we've never commented on our discussions with the DOJ," he said. "But given DOJ's statement this afternoon, it's important to set the record straight. Throughout this process, I have never offered to sell CNN and have no intention of doing so."
Some sources suggested to me that Stephenson never explicitly "offered" a sale of CNN, but brought up the various assets of Time Warner in order to take the government's temperature. Here's my full story for CNNMoney... | | | When the market closed at 4pm, Time Warner was down 6.5%. The stock is basically back where it was before AT&T entered the picture over a year ago... | | | So now what? Now we wait and see if the DOJ sues to block the deal. But sources said talks between the government and AT&T are ongoing in the hopes that an agreement can still be reached... | | "This is worth investigating..." | | Democratic lawmakers and advocacy groups rang alarm bells all afternoon long. Some critics of the deal, like Al Franken and the public interest group Free Press, reaffirmed their opposition while also raising concerns about Trump's perceived meddling.
-- Senator Brian Schatz tweeted: "Presidential power must be used wisely and fairly. I don't know the details here but this is worth investigating..."
-- FCC commissioner Jessica Rosenworcel tweeted: "Wait, are we really going to make the @TheJusticeDept use antitrust law to force the sale of a cable channel because the President doesn't like its news coverage? You can dislike consolidation but still find this extremely disturbing if true." | | | In the 4pm hour on Wednesday, a DOJ spokesperson issued a statement disputing any notion of interference. "The Department is committed to carrying out its duties in accordance with the laws and the facts," the agency said. "Beyond that, the Department does not comment on any pending investigation." | | Unanswered and unanswerable Q's | | -- When and why did Delrahim change his mind about the impact of this acquisition?
-- What will be the effects of all Wednesday's public pressure?
-- The question in this Derek Thompson piece: Did AT&T "push the narrative that the Justice Department's objections are all about" Trump's anti-CNN attitude?
-- Rich Greenfield's Q in his latest note to investors: "Who else could buy Time Warner?"
-- What is the government's stance toward the Sinclair-Tribune merger?
-- What's Rupert Murdoch thinking right now? | | "The president did not speak with the attorney general about this matter" | | In the first draft of this newsletter, I asked: Has there been any communication between POTUS and Jeff Sessions about this deal?
In the 9pm hour, the W.H. issued a denial: "The President did not speak with the Attorney General about this matter, and no White House official was authorized to speak with the Department of Justice on this matter," deputy press secretary Raj Shah said. This is a notable quote since Trump just had lunch with Sessions last week, and Trump has been publicly critical of the DOJ in recent days...
--> Delrahim also issued this statement via DOJ PR: "I have never been instructed by the White House on this or any other transaction under review by the antitrust division." | | AT&T says timing is now "uncertain" | | | FWIW: The wireless giant had previously said that it expected the acquisition to take effect by the end of this year. But on Wednesday morning, AT&T said the timing of the deal's closing is now "uncertain..." | | -- WSJ's lead: The DOJ's demands "threaten one of the biggest media deals ever..."
-- Bloomberg: "AT&T is instructing its legal team to prepare for a possible court battle..."
-- Here's Joe Pompeo's latest for VF... | | -- About last night: CNN's The Point newsletter will catch you up on the consequences of the Democrats' victories at the ballot box... (CNNPolitics)
-- The NYT has terminated its relationship with David Boies' law firm amid revelations that Boies "also contracted with investigators charged with quashing a negative story" about Harvey Weinstein... (HuffPost)
-- Boies defended himself in an interview with Lloyd Grove... (The Daily Beast)
-- Ilia Calderón will succeed MarÃa Elena Salinas as the co-anchor of Univision's nightly newscast "Noticiero Univision..." (LATimes) | | "Trump, Xi to face reporters" but they are "not planning to take questions" | | | That's the headline from CNN's Jeremy Diamond and Kevin Liptak... The two world leaders "are not expected to take questions" at a photo op on Thursday... | | All quiet on the Fox earnings call | | | Frank Pallotta emails: Many media reporters, including yours truly, listened in to the 21st Century Fox earnings call Wednesday afternoon to hear any interesting tidbits from the Murdochs following its recent talks with Disney. But unfortunately, bupkus. Lachlan Murdoch opened the earnings call by saying, "We will not be responding, at all, to questions or comments about recent press speculation." The call proceeded without any comments about Disney or any questions from analysts. However, Thursday is Disney's earnings call, so maybe Bob Iger will have more to say... | | Reese Witherspoon, Jennifer Aniston starring in this show for Apple | | The latest sign that Apple is really serious about original TV programming: The company has ordered "two seasons of a drama about the world of network morning television" starring Jennifer Aniston and Reese Witherspoon, Sandra Gonzalez reports.
Full disclosure: I know a lot about this project! The producers bought the TV rights to my 2013 book "Top of the Morning." The plot is all-new, but my book provides some background material. I'll be serving as a paid consultant on the show.
Here are the key takeaways about Wednesday's announcement:
-- Via Sandra's story: Former HBO exec Michael Ellenberg's Media Res is producing the series for Apple... Jay Carson "will write, executive produce and serve as showrunner for the series..."
-- Apple "outbid many of the TV industry's biggest players, including Netflix Inc., and committed to producing two seasons," Bloomberg's Lucas Shaw reports...
-- "The show doesn't have a name or a proposed air date (though spring of 2019 is a decent bet)," per Recode's Peter Kafka... | | | Sean Hannity has been reportedly pushing for this for a while. On Wednesday, he announced on the radio that Sebastian Gorka has joined Fox News. Gorka said on Twitter that his title is "national security strategist..."` | | By Julia Waldow:
-- The Roy Price effect? Amazon is investigating fresh allegations of sexual harassment, this time against actor Jeffrey Tambor. He says he is "appalled and distressed" by what he calls "this baseless allegation..." (Deadline)
-- An apology app!? Yes, the app, developed by Greta Van Susteren, lets users "accept" or "reject" apologies from friends and public figures... (TechCrunch)
-- Applications for ProPublica's Local Reporting Network partnership might have exceeded the organization's expectations. "The smart money was on 75," deputy managing editor Eric Umansky writes in a piece for ProPublica. "By the time the deadline hit on Sunday, we'd gotten 239." Winners will be announced in December... (ProPublica)
-- Apple is said to be developing an augmented reality headset that runs on a new "reality operating system" (rOS) and could ship out as early as 2020... (Bloomberg)
-- Lin-Manuel Miranda will be back on stage for a limited three-week run of "Hamilton" in San Juan, Puerto Rico... (NPR) | | Christopher Plummer replacing Kevin Spacey in 'All the Money in the World' | | | Sandra Gonzalez and Chloe Melas report: Actor Kevin Spacey, who is facing mounting allegations of sexual harassment and assault, will no longer appear in Ridley Scott's forthcoming drama, "All the Money in the World," two sources close to the film confirm to CNN. Christopher Plummer will take over Spacey's role in the film, which despite the last-minute change, is still set for release on December 22. The decision, a source told CNN, was made by Scott and producers from Imperative Entertainment, with the full support of Sony Pictures... Read more... | | Weinstein spokesperson disputes indictment talk | | A new statement from Team Weinstein on Wednesday, responding to Tuesday's news reports that the Manhattan D.A. is preparing to present evidence against Weinstein to a grand jury:
"We do not believe an indictment of Mr. Weinstein is imminent. A formal presentation will be made on Mr. Weinstein's behalf in the appropriate course of the investigation, and we strongly believe we will demonstrate that no criminal charges are warranted. Blair Berk and Ben Brafman will be defending Mr. Weinstein in any matters in New York." | | "Financial picture is bleak" | | | "The Weinstein Co. is trying to secure a financial lifeline that will allow the indie film and television studio to avert bankruptcy. The company still believes that it can find a buyer for its library of award-winning movies and programming without having to file for Chapter 11, but even with a cash infusion, its financial picture is bleak," Variety's Brent Lang reports... | | Alisyn Camerota will host a CNN town hall, "Tipping Point: Sexual Harassment In America," Thursday at 9pm ET...
-- Eric Weisbrod emails: What questions would you like CNN to address at the town hall? Send them on Twitter using #MeTooTownHall... or text, iMessage or WhatsApp 347-322-0415 | | | For the record, part three | | | By Francesca Giuliani-Hoffman:
-- China spends hundreds of thousands of dollars in Facebook ads geared towards international audiences, through state media agencies... (NYT)
-- InfoWars has reprinted over 1,000 articles from RT since 2014, without permission... (BuzzFeed)
-- Tom Steyer, the California billionaire who has paid for a TV commercial calling for Trump's impeachment, is now rallying against Fox News for suppressing the ad with a petition... (Forbes) | | | For the record, part four | | | By Francesca Giuliani-Hoffman:
-- Engagement done right: NiemanLab spoke to all-around social media rockstar Gene Park about the Washington Post's Reddit presence, beloved by the community... (NiemanLab)
-- A highly enjoyable profile of the eclectic Jay Caspian Kang by Karen K. Ho... (CJR)
-- Recipe videos and mouthwatering photographs are not all there is to food journalism. The New Food Economy focuses on policy, justice and health... (NiemanLab) | | CMA Awards show remembers tragedies | | | Lisa Respers France writes: Country music's biggest night kicked off Wednesday with a remembrance of what has been a year of tragedy. Held in Nashville, the The 51st Annual Country Music Association Awards began with an all star choir including Darius Rucker, Keith Urban and Lady Antebellum singing the Hootie and the Blowfish hit "Hold My Hand..." Read more here... | | Watch this! The first trailer for "The Post" | | | The first trailer for Meryl Streep and Tom Hanks' upcoming movie "The Post" debuted Tuesday night, Chloe Melas reports... Directed by Steven Spielberg, the movie tells the true story of the Washington Post's renowned publisher Kay Graham (Streep), and its editor, Ben Bradlee's (Hanks) decision to publish the highly confidential Pentagon Papers in 1971... Here's the trailer... | | | For the record, part five | | | By Lisa Respers France:
-- Taylor Swift's new album tracklist is out.. The album drops on Friday... "Fans are waiting to see if the music will pop up on streaming services at the same time..."
-- Gay Talese reportedly feels bad for Kevin Spacey and thinks Spacey's first accuser should "suck it up..."
-- Sean Astin starred in the "Lord of the Rings" movies, and he has some thoughts on a possible TV adaptation... | | | Email brian.stelter@turner.com... I appreciate every message. The feedback helps us craft the next day's newsletter! | | | Get Reliable Sources, a comprehensive summary of the most important media news, delivered to your inbox every afternoon. | | | | | |
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